The Historical Precedent
On August 19, 1953—just seven months into Eisenhower's first term—the CIA executed Operation Ajax, overthrowing Iran's democratically elected Prime Minister Mohammad Mossadegh. The stated reason was anti-communism. The actual driver was oil.
The dividend: American oil companies went from zero stake in Iranian oil to 40% ownership. Britain retained 40%, with the remainder split between Dutch and French interests. Resource control, not ideology, drove the operation.
The Pattern Match
The current administration's focus on Greenland, the Panama Canal, and broader Western Hemisphere dominance follows a strikingly similar pattern—both in timing and underlying motivation.
| Element | 1953 Iran | 2025-26 Greenland/Panama |
|---|---|---|
| Cycle Position | Year 1 (months 2-8) | Year 1 (ongoing) |
| Stated Rationale | Anti-communism, Soviet threat | National security, China threat |
| Actual Driver | Oil control | Rare earth minerals, trade routes |
| Target Resources | ~40% of world's known oil reserves | 31 of 34 EU-designated critical minerals |
| Rival Power | USSR | China |
| Method | Covert coup | Economic pressure, negotiation, implied force |
Why Year 1 Enables Bold Moves
New administrations act most aggressively early in their terms. The historical record suggests this is not coincidental—it's structural.
Political Capital Dynamics
- Fresh electoral mandate provides cover
- Opposition party still reorganizing
- Maximum distance from accountability (midterms 22 months away)
- Actions framed as "correcting predecessor's mistakes"
Resource Targets — 2025
- Lithium, graphite (EV batteries)
- Neodymium, cerium (tech manufacturing)
- Arctic shipping routes
- Panama Canal transit control
The playbook hasn't changed: act boldly in Year 1, maintain plausible distance, let others execute. What has changed is the resource at stake—from oil to the critical minerals that power the AI and EV revolutions.
Presidential Cycle Returns
The Presidential Election Cycle Theory, first documented by Yale Hirsch in 1967, shows consistent patterns in market performance across the four-year cycle. Year 2—where we're headed—historically underperforms.
Key statistic: Since 1943, the S&P 500 has posted positive returns in Year 3 of the presidential cycle 90% of the time—compared to 70% across all calendar years. The third year's average return (15-17%) is roughly 3-4x the second year's average.
When experienced traders feel conflicted about market direction—as the original X thread expressed—it often signals that the market itself hasn't priced in the full range of outcomes. In Year 2, this uncertainty typically resolves toward volatility strategies outperforming directional bets.
2026 Sector Framework
If the historical pattern holds, we may see near-term volatility from geopolitical rhetoric, but eventual deals favoring U.S. resource access. Position accordingly.
| Sector | Stance | Rationale |
|---|---|---|
| Semis / AI Infrastructure | Tactical OW | Capex cycle intact but volatile; buy dips |
| Utilities / Power | Accumulate | AI power demand + defensive characteristics |
| Financials | Opportunistic | Deregulation tailwind + higher-for-longer rates |
| Healthcare | Underweight | Policy uncertainty; wait for clarity |
| Defense | Neutral → Long | Geopolitical tensions support spending |
| Critical Minerals | Overweight | Direct beneficiary if resource push succeeds |
The Thesis
The Iran parallel is stronger than most realize. Resource-driven geopolitical moves disguised as security concerns is the American playbook—from 1953 to today. What's different:
1953 Outcome
- U.S. oil companies gained 40% stake
- Iran became reliable Western ally for 26 years
- Blowback (1979 revolution) came a generation later
2025-26 Trajectory (If Pattern Holds)
- Near-term volatility from rhetoric
- Eventual deals favor U.S. resource access
- Beneficiaries: rare earth miners, Arctic infrastructure, defense
The 2026 playbook: Trade the range until midterms clarify direction, then get aggressive for the Year 3 rally. When you can't get a read, that's market information—position for volatility, not direction.